Engage: Mobile banking attracts Millennials

The British Office for National Statistics revealed that 13.8 million people were born between 1980 and 1994, making up more than a fifth of the UK population. In the US, this group, that runs up to and just over the year 2000, labelled Millennials, now outnumber the Baby Boomers, who were those born in the 20 year period after World War II.

These consumers have grown up using online services and smartphone apps and have rarely engaged with traditional branch and paper-based banking services. As such, mobile banking app usage in the UK has surpassed desktop logins to online accounts [British Bankers Association (BBA) 2016]. The BBA reports that there are now 11 million logins to mobile banking apps each day, an increase from seven million per day in 2014. Mobile banking apps were used four billion times in 2015.

Focus on apps

Apps offer obvious benefits for the financial sector, so they need to be an area that the industry focuses on. Mitek Systems’ Mobile Deposit app is used by 75 million consumers, an increase from 47 million in 2014, and is estimated to have saved financial institutions $2.5 billion in cheque processing costs according to the company.

Meanwhile, Standard Bank has seen its ATM and branch transactions shrink to just five% of all banking transactions. However, its SnapScan mobile payment app is used by 22,000 merchants and the bank has asserted its commitment to enabling mobile banking throughout Africa.

In February, Royal Bank of Scotland (RBS) opened its Open Experience technology centre at its Edinburgh, Scotland, offices. The centre is designed to foster collaborative development of apps for RBS customers and new technologies for the bank. IT experts at Open Experience are supporting local start ups and working with financial technology companies and open source technology partners to explore new technologies and develop ideas into customer pilots.

Helping in B2B

In the B2B space, many wealth managers and insurance brokers are benefiting from being able to call up customer information on their tablets or smartphones, which helps them generate quotes while they are still with customers. Phone-based features such as automatic GPS stamping, pre-filling forms and barcode and QR scanning can further transform paper-based transactions using mobile apps.

An example of this is a Red Hat customer in the insurance sector that has developed a tablet app to enable brokers to provide quotes for a complex multi risk product while they are out in the field. Brokers can use their tablets to take photographs of farm assets, equipment and outbuildings for comprehensive risk assessment. Data synchronisation helps enable full app functionality, even when devices are offline. The app is fully integrated with the insurance company’s back end systems, enabling brokers to instantly look up customers’ details and update back end systems with quotes, payment information, and images of signed documents. The insurance provider stated it saw a return on investment within one month of launching its mobile app.

Scarce developers

Yet one of the challenges voiced by the financial services sector is the scarcity of developer resources in meeting the demand for apps. Mobile app strategies that are underpinned by mobile app development platforms and tools, application programme interfaces (APIs) and micro services-based architectures, cloud and open source technologies, can help reduce the time, effort and cost of the initial development and ongoing maintenance of apps, while avoiding vendor lock in.

As we have seen with Royal Bank of Scotland’s Open Experience initiative, app demand can encourage further collaboration between IT specialists, entrepreneurs and business managers. We have seen handset vendors teaming up with telcos and full stack providers to provide hardware, pre-packaged semi-custom apps, and support offerings to help enterprises to develop and deploy apps to market faster. Cloud vendors are also playing an increasing role in the mobile apps market, broadening their offerings to support enterprise developers and business managers using technologies such as mobile application platforms, rapid mobile application development (RMAD) tools, analytics and more.

Hardware vendors are also assisting the financial services sector in meeting app demand. Samsung Business Services offers semi-custom apps that enable mobile deposits, balance checks and printing of statements, backed by two factor authentication (2FA), biometrics and enhanced forms. These features enable richer customer data capture, with more secure back end integration to banking systems of record.

Love those Millennials

The financial services sector has an opportunity to deepen its engagement with Millennials through well designed apps with easy to use features. Compelling apps can deliver enhanced, personalised customer services, combined with more robust security and tight integration with back end systems. Mobile devices also offer a source of rich customer data, which can aid future marketing efforts.

Financial services organisations should prioritise the key business processes that lend themselves to quick successes and match apps and use cases to consumer experience and expectation. By focusing on their customers, delivering great user experiences, driving continuous innovation and providing as many security safeguards as possible, financial services apps are more likely to gain adoption and usage and influence customer loyalty.

Red Hat is a provider of opensource software solutions, using a community-powered approach to provide reliable and high performing cloud, Linux, middleware, storage and virtualisation technologies.

About Smart Chimps

Smart Chimps is the creation of freelance editor, writer and media trainer, Heather McLean. Heather has been involved in telecoms journalism since 2001, specialising in mobile since 2002. Find out more